(Applicant's Abstract) Type II cell hyperplasia is a hallmark of pulmonary fibrosis, but the role of the epithelium on the fibrotic process is unknown. Although there has been numerous studies on the mesenchymal epithelial interactions in the developing lung, there have been relatively few studies in the adult lung. The purpose of this project is to define the epithelial mesenchymal interactions in the adult lung especially as they relate to pulmonary fibrosis. Much of the focus of this proposal will be on the biologic antagonism between KGF and TGF-beta. KGF is an important growth factor for type H cells and induces differentiation in vitro, whereas TGF-b inhibits proliferation and antagonizes the effects of KGF on differentiation. Another major question that remains are differences between normal cells and hyperplastic type II cells and if hyperplastic type H cells produced by KGF are different from hyperplastic type H cells seen in fibrotic lung disease. In co-culture normal type II cells inhibit fibroblast growth, but the effect of hyperplastic type II cells from fibrotic lung on fibroblast proliferation is not known. The in vitro studies in this proposal rely on two new culture systems for rat type II cells to maintain differentiated function of type H cells. One has apical access and the other basolateral access. In this proposal we seek to determine (1) if alveolar type H cells can be stimulated to inhibit fibroblast proliferation, (2) the signaling pathways for KGF especially those that lead to differentiation, (3) mechanisms for KGF and TGF-b antagonism, and (4) effects of INFY on production of SP-A and SP-D, growth factor receptor expression, and production of chemokines and profibrogenic growth factors. These studies are designed to define the interaction between alveolar epithelial cells and fibroblasts and mechanism of action of KGF.